tv Nightly Business Report PBS May 4, 2012 1:00am-1:30am PDT
>> this is n.b.r. 'm tom hodson. susie's on assignment. somewhere between 28 and $35 per share. that's how much facebook is hoping to get. slow at the nation's retailers as americans become more cautious about spending. what goes into a can of paint. for kelly moore in california, it's a lot of red, white and blue. that and more tonight on nbr. we begin this evening with some new details of what could be one of the laurenist stock sales this year when facebook sells its stock to the public perhaps as early as this month, it is aiming for a price between 28 and $35 per share. that sale could happen within a matter of weeks. at the high end of the range, the sale could raise nearly $12
billion and value facebook's business at $95 million. that valuation comes just days after facebook says business was slowing. while revenues were up 45% in the first quarter, profits dropped 12% as it spent heavily higher in sales and marketing people and expanding its technology data centers. >> whenever you see high growth company showing not only decelerating revenue growth, but significant increases in expenses, in some cases that actually exceeds the revenue gains that causes we think a reasonable level of interest. and more explanation. >> facebook supporters try to explain it by saying the company's investing for future growth. now founder and ceo mark zuckerberg could be worth an estimated $18.7 billion on the stock sale. he won't be the only facebook
employee worth millions. later on this week we'll look what the facebook stock sale could mean for silicon valley economy. >> are we saving american jobs or just overcharging consumers. "nightly business report" is brought to you by: captioning sponsored by wpbt >> stocks fell today despite good week for the job market, actually. fewer americans filed for unploimghtd insurance for the first -- unemployment insurance for the first time in the past week. new claims fell by 27,000 down 365,000. still investors are pretty worried about the april job numbers due out tomorrow. worried those could come in weak. the dow idustrials fell 62 points, the nasdaq losing 35,
the s&p 500 500. down fend. a slow down for some of the nation's retailers. the es americans are still shopping but not at the pace we have been. april sales are disappointing. some blame early easter but there may be more to it than that. erika miller is in new york. >> shoppers flocked to costco for low prices and vast selections. >> we buy everything from household cleaners, clorox, barbecue sauce, tissues. >> for many cheap gas is also a draw but it may be less so than last year. according to rob carroll whose firm does business with costco. >> now that gas prices have stabilized somewhat, at least on a year-over-year basis. they have adjusted and people it seems are potentially less likely to travel further to go to costco. >> costco sales rose only 4% in april excluding fuel but it wasn't just costco that fell short of expectations. so did macy's, target, kohl's
gas, saks, walgreen's and others. before you get worried for the outlook for consumer spending it's important to realize there were several factors hurting business in april that were beyond any source control. >> we have the easter shift. and that always complaints the read -- complicates the read. either it's a strong march or a weak april or vice versa. >> the other issue was colder weather at the end of the month. there's hope may could be strong. there are five weeks between east ter and mother's day this year. last year there were only two. that means consoomplez will have a few -- consumers will have a few extra paycheck in the bank. area miller nbr harlem. >> what about those jobs. tomorrow morning we will learn if the u.s. created any jobs last month and if so how many. job growth has been flowing nationwide. nebraska and north and south dakota can brake about having the lowest unemployment rates in the nation. diane east brook is in omaha tonight.
>> if you're in the market for a job, come to omaha. even in the debts of the great e rest, unemployment never rose above 5% here. it's just north of 4% now. what helps omaha is the diversity of employers. it's home to companies like mutual of omaha. mutual specific and several hospitals. agriculture reigns here. it makes conveyors and elevators for grain billions. president and ceo tom schroeder says the hottest demand for his system is coming from overseas. >> the higher nrkz allow for -- incomes allow for a better diet. in some places like the soviet countries, the infrastructure needs are really big. the facilities got run down over decades of know get so there's a lot of build infrastructure there. >> ernie goss thinks the only
thing that could derail the economy here is the trade imbargain. >> back in 2003 back december, that really halted beef sales to japan and japan was the number one trading country and the rest all of a sudden it wasn't number one, it hasn't returned to number one. >> and of course the strong profits that are being generated by agriculture are trickling down to other parts of the economy here as well. so you're seeing retailers adding johns. and restaurants -- jobs and restaurants adding jobs as well. tom. >> it certainly sounds like a booming job market there in nebraska. diane, are there concerns about not enough people to fill those job openings? >> absolutely. in fact, when we were talking to the folks at inner systems, they have openings for 45 workers, and having a real tough time filling some of those jobs. and it's in areas we talked about before the skilled trades. there's a big demands here for welders. >> let people out and take a
look at kind of omaha to the rest of the world. we've seen china slow down. we've seen europe in recession. it's a global market when it comes to agriculture products. could that slow some of the growth, some of the optimism you're seeing? >> it's possible if demand for grain and food would decline. there are some fears that if spain would stop importing grain, would not import as much food, it could impact companies like conagra. >> which clearly has a big preans there. diane eastabrook reporting from omaha, nebraska. thanks diane. >> i'm susie in omaha. >> facebook going public. it's going to be a big deal raising billions of dollars. all of those millions will nibt lots of new millionaires. silicon valley looks at how the
influx will affect the local economy. >> more electric cars like this nissan lease may roll out of boardwalk auto under in redwood city california after environmentally conscious millionaires cash in their stock. the auto dealer is counting on it. >> we have been doing marketing through facebook for months now to increase interest and get boardwalk's name in front of the facebook employees. in anticipation of the ipo. >> it's not just cars, the ipo hype has been driving the local real estate market goo a frenzy -- into a frenzy. >> the market is really hot right now. >> caldwell banker vice president mike james the pending ipo along with wealthy buyers from other high tech companies is driving up prices and communities near the facebook campus. >> about 20% is what most people are calling but it's a day to day event. because there are still multiple offers on every house pretty much in palo alto in menlo park.
>> means higher properties for home owners. county tax assessor mark church says the county expects to generate $3 million in property taxes from facebook alone next year as it makes improvements to its new campus. >> that's more than double the property tax currently generated. all of that money will be used to support local schools, our healthcare system, public safety, transportation projects and other vital services. >> the trickle down of facebook wealth won't be instant. facebook employees will have to wait three to six months before they can sell their stock. but when they do, there may be lots to like. >> while the facebook ipo will boost silicon valley's economy across the board the real benefit may be long term as early facebook investors take their profits and invest those in new companies. looking for the next facebook. >> more drive, more interest back into venture capital and into investing which will then again bring more money into
silicon valley creating more jobs and more opportunities. >> robin macel hatten nbr california. >> the price cure prices. when there are high prices, competitors move in to increase supply. when prices are low, supply will drop. and we may be seeing the beginning of that with natural gas. prices of natural gas are half of what they were just seven months ago. we've seen a big price drop over the past several months and several big producers have announced they will cut back on production. exxon mobile, conocophillips and chesapeake energy have scaled back their drilling due to the glut of natural gas. there's 46% more gas in storage today compared to last year at this time. john woods trades natural gas. president of jj woods and associates with us from new york. john are these companies getting out of the looking for neutral gas at the bottom of prices. >> i think they're trying to establish a point where they say listen we're going to cut this
back and we're going to try to get this market up to where it's comfortable for us. that's 275 to $3. at these lower prices, only the consumers are actually winning on this one. >> consumers are winning in a big big way, no doubt bit. what is profitable for these producers. es it significantly above the levels or a little bit. >> anything above $3 at this point in this economy is going to reap rewards for these guys. but is it going to get there? not in the near term. it just doesn't seem like it's in the cards right now. >> we have seen demand at least for electric utilities for natural gas increase significantly year-to-date of 33% compared to where it was just one year ago. that is one pocket of demand that we have seen pick up, haven't we? >> yes. i mean it's good to see that people are actually starting to come into this market and actually use it. but on the flip side if you look at the overall picture about industrial demand, you've had factories shut down, shorten shifts. what we had in the past was an
industry that would just take this gas out. industry is non-existent right now due to the economic conditions we're experiencing. >> that means we've got a lot of gas in storage, good for consumers as you mentioned. what about for investors, is it the value play at this time. natural gas and their producers where the price is so low. >> i think so. i mean it's just a spec investor i think these prices are very very attractive. last month we had a 190 low which was hit i think it was 2001. so these are extremely low price. you can't look at the first couple months so you can't go long data. you look past the back end of the board. you're starting to see some good value back there and starting to see some people come in there and put on these long dated strips and position. >> you're taking a look at natural gas prices coming up for the next heating season which is going to be october, november and december. john we'll leave it there. john woods along with us with jj woods and associates.
next week negotiators from eight nations will join the united states in dallas for talks on a new trade agreement. you know what that means, right, usu.s. negotiators want access o hundreds of consoomplez. darren gersh reports tonight it could be some of the last jobs left here at home making shoes. >> tom, when you buy athletic shoes, you probably don't know it but you're most likely paying somewhere between 5 and $15 in what's called an import tariff. a tax on imported shoes to protecting jobs in the united states. and that tariff has set off a sneaker war. on one side there's new balance, the last company to make athletic shoes in the united
states. on the other side you'll find retailers and companies like nike. they design shoes in the united states. but they manufacture them in countries like vietnam. >> we have a 1930's tariff structure in the 21st century, and that is really ham perking our awe -- hampering our ability to grow jobs. >> the obama administration is working on a new trade deal with vietnam and other countries called the transpacific partnership. as the world's fastest growing shoemaker, vietnam wants to shoot taif eliminated and so do most american footwear companies. no surprise, new balance disagrees. >> we think that the u.s. government should be working to protect u.s. jobs and vietnam's already winning in this category. so giving away our 1500 in the 4,000 connected jobs from our supplier base is a situation where i don't think we'll get them back. >> new balance says it already faces higher costs for its u.s. production. without tariff protection it
wouldn't make economic sense to manufacture shoes at its factories in maine and massachusetts. for now those five factories are doing well. >> we're growing our employment in our north american manufacturing. we've got more jobs today than we've ever had. we just added 65 new jobs. >> but jobs designing and marketing shoes pay more than jobs making shoes. and new balance competitors say if the share tariff's are lifted thee have more money to invest and create more higher paying jobs in the united states. >> we're focused on building jobs in a sector that relies on innovation and design and distribution. so we will continue to push important that. >> tariffs of vietnamese shoe imports bring in about a quarter of a billion dollars. so who gets that money if the fax is eliminated. shoe importers say consumers will benefit. but new balance says the market hasn't worked that way. vietnam is already a low cost producer taking business away from china. >> as volume shifted from china to vietnam, prices did not go down, they went up. >> the fate of these out u.s.
workers may be decided at the negotiating table. are they protected or subjected to more competition in hose of gaining more jobs higher up the economic ladder. darren gersh nbr, washington. >> how about it? would you pay more for sneakers if it saved a u.s. job. we posted that on our facebook site and here's what some of the conversation was on-line today. robert said yes, i would. it's our moral immayorive to support -- imperative to support each other by purchasing what's made here. mark disagrees though saying no, only pay $15 total for sneakers. finally oliver says maybe but wonders, are quote, what assurance am i getting that my purchase was used to support an american job.
>> u.s. stocks couldn't muster many buyers today as they awe wait tomorrow's job data. the focus will begin with the s&p 500 hitting lows on an hour before the closing well. now we did see trading volume throw increase on both exchanges the registry on 834 million shares, the big board almost 1.9 billion on the nasdaq. ner energy stocks lead for the second session down one and-a-half percent. material and technology sectors following about 1% each. ahead of that all important tomorrow jobs report, oil prices continued k508ing off here this session. crude oil in enact settling below $103 per barrel. there are reports of record high oil inventories at a key distribution hub in oak.
resources down almost 7% despite better than forecast earnings. murphy oil fell more than 6% disappointing revenues and marathon oil fell more than 4% thanks to disappointing earnings. another commodity gold, prices there fell to a one week low after the european central bank said it will not be providing new stimulus soon for the struggling european economy. that fell more than 3%. the company does have copper operations in indonesia and today that country announced a new export tax on raw medals. however -- metals. it is not affected thanks to an existing contract. while there is plenty of anticipation regarding facebook's upcoming stock sale, another social net working company has seen big growth helping connect companies and people looking for work. it's linkin the first quarter earnings six sense stronger than anticipated. the firm disclosed $119 million byout of content sharing slight looking for future growth there. they went public last year, $45 per share, more than double
since. the stock up almost 3% during the regular session. it popped over $117 per share in after hours action after the strong earnings report. one of the biggest disasters today, green mountain coffee. huge volume. thanks to another financial disappoint, analysts are now worrying the company's management is losing credibility with investors. gmc's share is losing more than half the value falling to a 52 week low for the second time in three quarters sales were less than expected. the company also warned about slowing growth of its pay cup coffee sales. one of the big stock losers last year has named a new ceo. james hughes joined first solar earlier this year. he was named ceo late today. the stock is down more than 85% over the past year as solar panel prices have plummeted. after disappointing quarterly loss, the company remains optimistic enough it actually raised the financial forecast for the year.
our exchange traded fund market flash here down across the board for actively traded eps off by about 1% each. that is tonight's market focus. congress runs to work next week as the clock continues ticking to avoid interest rates from college jones jumping significantly. up commented tater tonight says the entire higher education system needs to be redesigned. jamie merisotis president of the lumina foundation. >> all of the chatter about
college affordability isn't new. keeping college affordable has been the mood music for our execution of higher education for many years. but now the music has stopped and the reason has to do with how we pay for college. at the cost of education has increased, colleges and universities traditionally have relied on two major sources of funds. government appropriations and student tuition to pay for rise in costs. when one was in short supply we usually look to the other to make up the difference. now, however, both governments and individuals are near the limit in terms of their capacity to pay. and that's a big problem. since our nation's future economic prosperity depends on having a lot more people with post-secondary skills. the way forward is a redesign of how higher education is deliver in america. we need to leverage technology to deliver more high quality excel rated learning. we need colleges and universities to serve more people at the lowest possible cost per degree while improving access and equity. these and other ideas will need to be tackled soon.
designing and building a better system means confronting some of our most cherished assumptions about higher education but the need for millions more americans to get the skills and knowledge represented by college degrees is urgent and absolutely clear. i'm jamie merisotis. join us tomorrow here on nbr. it is the april employment numbers, a big report we're going to see just how many jobs the u.s. business has created last month. presidential elections are coming up this weekend big election there. we're going to hear what is the take for the global economy. sincsinco de mayo. we started a new series tonight made in america the housing market was ground zero. its slaps took with it a lot of businesses relying on homes from construction to appliance makers. but some of those smaller companies survived and are now
thriving. here's mike hegedus in san carlos, california. >> you can brush it on, you can roll it o you can get it on your paints. paint, the kelly moore planted in san carlos california turns out nearly 40,000 gallons a day. it is one of the large else employ owned paint operations in the u.s. part of a $13 billion industry domestically. 140 workers in the san carlos facility, 1500 worldwide including 150 retail outlets in seven states. >> we own currently 58% of the stocks. and the rest of the stock is owned by the moore family. >> you like light, they got it. you like, they got that too. >> a lot of reds. that telei teal is looking into. greens. and yellows. noorlings arneutrals are still . but the teals, reds and orange. >> i started off weigh.
>> steve de voe is chairman and ceo of the 66 year old company. he does not paint a pretty picture what he and the other paint manufacturers have been through the last couple years. he does point out why kelly moore does pai fair better than most. history, starting in 1946 by bill kelly and william efforts moore it was sym paul making quality payments that professionals would be proud to use. and second understand that those professionals are not only your customers but your partners. what a concept. quality and loyalty. chasing the market down. >> what we stay focused on was number one, what we're known for which is quality. we know who our customers are and we never took our eyes off that we became a real strong partner with them over the couple years that the downturn hurt us. >> kelly moore set up classes, tutorials for small business owners and customers to teach them how to survive tough times and look for bigger markets. in western regional player in the u.s., kelly moore now ships
paint to china, japan, cambodia, vietnam. the driver. >> quality products for one, and the second factor is that it's made in the u.s. that's what they see, that's what they want, that quality. >> what kelly moore seeks is the next great break through in payment. odorless, environmentally friendly. strives have been made in almost every area, except one. >> it can't apply itself. that's what people always want it to do. a lot of it lately is all about ease of application and saving time and time is money. >> the color of money. always a good choice. nightly business report, san carlos, california. >> next week mike will join us with another made in america profile. joining us for this one we're going to meet a company called durango california base taking its holiday displays around the world. that's it for us here tonight. good night, thanks for joining us. on-line at nbr.com and right